Andy Hightower at the Kentucky Club for Growth suggests the hand-wringing about the state budget “shortfall” may be off base by almost $200 million.
“Let’s say January is a precursor and state revenues remain down 4% for the next five months,” Hightower wrote. “That would leave the state with a $277 million shortfall, only 60% of the prediction.”
He also said some of those pushing for tax increases may be discounting the effect bad weather had on business activity in January.
“This is not to say there would not have been a decline, only that the freeze froze commerce to a significant degree, which was reflected in revenue numbers,” Hightower said. “One only need look at the thaw this weekend when people were shopping like Christmas to have a sense of the truth here.”
Another point to be brought out from the latest budget numbers is that cigarette tax revenues were down 22% in January from January 2008. Kentucky is already down over $7 million in cigarette tax revenue for the fiscal year. That’s before the tax increase.
Food for thought, perhaps?